UANI: Iran's Tankers Become More Active as Oil Earnings Rise

NITC tanker
File image courtesy National Iranian Tanker Company

Published Aug 2, 2022 5:27 PM by The Maritime Executive

Iran is overcoming trade barriers and sustaining a high level of crude oil exports by deploying more of its own sanctioned tankers, according to watchdog United Against Nuclear Iran. 

The nation's petroleum industry is heavily sanctioned by the United States, but it continues to export a steady flow of about one million barrels a day into the global market; in fact, it is earning more money than it has in years thanks to rising oil prices. Its clandestine trading network relies on a small number of private shipowners who are willing to violate U.S. sanctions and evade detection in exchange for outsize financial returns. 

UANI estimates that about 200 foreign-flagged vessels have engaged in this trade in recent years - but many of them are now switching to the covert shipment of Russian oil, which carries a stigma due to the invasion of Ukraine. The organization has identified 16 foreign tankers that have made the switch from Iranian to Russian cargoes, and trade flow analytics firm Vortexa has identified 11; there may be more, given the covert nature of the operation, which relies in part on high-seas STS transfers. The switch has reduced the availability of privately-held tonnage for the Iranian oil trade.

Ongoing American enforcement activity may also be disrupting Iran's network of foreign-flagged tanker operators, according to UANI. Last month, the U.S. Treasury sanctioned several of Iran's shipowning and trading partners, including an alleged repeat offender in Singapore with ties to multiple "dark" vessels.

But the reduced availability of foreign tonnage is not necessarily an obstacle to Iran, since the nation owns its own aging tanker fleet. The Iranian fleet's activity has increased over the past month, according to UANI. In all, nine Iranian-flagged tankers were detected loading in July. An increasing number are openly heading for Venezuela, delivering ultra-light condensate in exchange for ultra-heavy sour crude. Venezuela needs condensate to dilute its tar-like oil for export or refining; without it, the heavy crude is too difficult to ship. Since this exchange is a swap, and both parties are already heavily sanctioned by the United States, there is no obstacle to using sanctioned Iranian tonnage to carry out the transportation.